My name is Deb Fox and I am a CPA and this is my first blog post. As a CPA I was aware of the financial inequalities created by the Defense of Marriage Act (DOMA) and I felt that it was wrong. I was elated to learn that the Supreme Court of the United States agreed with me.
I have the unusual blessing of having not one, but two gay brothers. One is my younger brother; he and his partner have been together for 13 years and they live in San Diego. The other is my older stepbrother; he and his partner have also been together for many years and live in Orlando, Florida.
Our parents are in their early 80’s and have been great role models for all of us. They have always been accepting of my brothers and their relationships. Our family is very close and we enjoy our time together as much as possible. We are fortunate to be blessed by loving and supportive relationships. This post is dedicated to my brothers and to all those that celebrate this victory with me.
A brief history of DOMA & a glimpse into what it means now for the 130,000 same-sex couples that are legally married living in the current 13 states and in the District of Columbia:
- In 1993, the Supreme Court of Hawaii, ruled that the state needed to show a “compelling state interest” in disallowing gays and lesbians from marrying
- The case turned marriage into a possibility of obtaining the same rights of partnership as heterosexuals
- In 1996 DOMA was signed into law, which restricted federal law from recognizing any unions between two persons who were not a man and a woman. The rule also said that no state had to accept any other states definition of marriage
- On 6/26/13, the U.S. Supreme Court declared DOMA (section 3) unconstitutional .The federal government cannot discriminate against married lesbian and gay couples for the purposes of determining federal benefits and protections
- States can still define marriage (section 2). The IRS will provide guidance about what happens if you are in a non-same sexed marriage recognition state
By striking down DOMA this now means that same-sex couples who are married in the 13 states and DC where same-sex marriage is legal are now “qualified” (spouse related) to receive:
- Receive Social Security, Medicare, & Disability Benefits
- Receive Veterans & Military Benefits
- Receive Cobra health insurance benefit continuation for your spouse
- File Married Filing Joint or Married Filing Separate if you are married on 12/31/13
- Not be taxed by your employer for the health care benefits provided for your spouse
- Take Family Medical Leave for your spouse
- Receive wages and retirement plan benefits for deceased spouse
- Make unlimited tax-free gifts to each other as long as the receiving spouse is a U.S. citizen
- Leave your assets to your spouse without incurring estate taxes (Edie Windsor)
Congratulations to those that have been married for years & have not had the rights or the benefits as those heterosexual couples that obtained them when they spoke “I do”.
There is a lot to be considered with this recent decision by the Supreme Court which is why I have limited this initial post to the 2013 tax year. The IRS will soon let us know if we need to consider the tax implications retroactively – 3 years back or not.
But for now my friends, this is the time for you to:
- Enjoy the 1,138 spousal benefits provided by the federal government – if you are in a same-sex marriage and living in a location that recognizes your marriage
- Consider changing your W-4 from single to married. You need to make sure that you are “withholding” enough to prevent being accessed a penalty
- Know that the United States tax is a “pay as you go” tax system, which means that tax must be paid as you receive or earn your income. See IRS Topic 306 – Penalty for Underpayment of Estimated Tax
- Celebrate – it is Pride week here in San Diego! Maybe, I will meet you there?
Happy Pride and Congratulations on a long fought battle.